Most Post-2006 Condo Buyers Are Underwater?
In an article describing how co-ops are much better positioned for the downturn because, unlike condos, their position in foreclosure proceedings is senior to the bank, comes this doozy of a quote from the president of a property management company in Manhattan: I think it’s safe to say that the value of any apartment purchased…
In an article describing how co-ops are much better positioned for the downturn because, unlike condos, their position in foreclosure proceedings is senior to the bank, comes this doozy of a quote from the president of a property management company in Manhattan:
I think it’s safe to say that the value of any apartment purchased in the last two years is less than its purchase price. The simple calculation is that if you bought an apartment a year ago and financed 90 percent of the purchase price, as many did, and now it’s worth 20 percent less, you’re upside-down as an owner.
That’s another reason why co-ops are in better shape: Most owners had to put down a minimum of 20 percent when they bought.
The Downside for Condos in a Downturn [NY Times]
dibs — it IS a problem if other buyers in your condo were flippers or are in arrears!!! That’s what happened in FL — people are living in buildings that are all but abandoned; resident cond owners cannot pay for the upkeep of the building as a whole with other buyers foreclosed, in arrears.
I know people could do 10% down financing on condos (or even less) — but do we have any figures/stats on what percentage of people in NYC did that in past several years?
And – do we have any recent resale figures (or even lisings) of condos in buildings that perhaps had 1st buyers in 2007?
As dittoburg said, none of this is a problem unless you were trying to flip it or you go into arrears on your mortgage payments.
This is only in the case of new construction condos under the auspices of tax abatement; NTY wants to smear the condos across the board–
“Please stop letting your prejudice against any new construction get in the way of fiscal analysis ”
I assume this is about the comment I made on the other thread?
Your comment is characteristic of someone with no experience.
From the co-op’s perspective, prices have to fall further before owners are underwater and are more likely to walk away.
“That’s another reason why co-ops are in better shape:Most owners had to put down a minimum of 20 percent when they bought.”
Really – how do you figure????? If I bought a 1M condo and put down 10% (100G) and the place is worth 800G now – I lost 100G of my equity and the bank lost 100G of their equity – which I only have to pay if I move and in the meantime I can use my 100G as I well please.
If I bought a 1M coop for 1M with 20% down – I lost 200G of MY equity and the bank is still whole.
Personally I’d rather have the bank down 100Gs with me (if I get into trouble I bet they’d be slightly more willing to renegotiate)
Besides as DIBS said – it has nothing to do with the ownership method (coop v condo) – you know you can put down 100% if you want
Please stop letting your prejudice against any new construction get in the way of fiscal analysis – it makes you sound very dumb.
Problem if you are a flipper or lose your job. Otherwise, not a problem, but a psychological burden.
Certainly true for anyone who bought anything, anywhere with only 10% down.